Britain must undertake a "wholesale re-examination" of its involvement in the Nato conflict in Libya after the murder of the leader of the anti-Gaddafi forces, former Liberal Democrat leader Sir Menzies Campbell has said.

Sir Menzies Campbell says the 'assassination' of General Abdel Fattah Younes, the rebels' military commander, should spark a complete review of Britain's role in LibyaPhoto: IAN JONES

Sir Menzies, the party's former foreign affairs spokesman, said the "assassination" of Younes should spark a complete review of Britain's role in Libya.

"This assassination now provides an opportunity and a spur for a wholesale re-examination of policy."

There was an opportunity now, he said, for Britain to think about "the end-game" of the conflict in Libya.

He said: "We know that the United States has not taken a full part, we know that in France and Italy there are differing views.

"I think if we are going to get this right we have to be clearer about defining what success would amount to. If you like – what the end-game is."

The key would be how Col Gaddafi would be treated if he was overthrown. Allowing him to remain in Tripoli under house arrest would risk seeing him treated an "icon".

Sir Menzies was speaking as Dr Fox, the Defence secretary, flew to the United States for talks with Leon Panetta, his American counterpart in the Obama administration.

Dr Fox said in an interview that "the key to the Libyan resolution" was not in the hands of Nato. Instead it was key for Gaddafi's supporters to accept that he was a "busted flush".

He told BBC Radio Four's World This Weekend programme: "The key to the Libyan resolution will be whether or not the close circle around Col Gaddafi recognise that there is no point in investing in him, he is a busted flush, and that he will sooner or later have to leave power."

He added: "When the penny drops with them, that is inevitable then you are likely to see the sort of change in the political momentum that we have been looking for."

Dr Fox conceded the rebels will "always had limited capacity on the ground", although "they are being assisted in terms of communications and their logistics and making the best use of the equipment that they had".

Dr Fox added that other European members of Nato had to show greater commitment to the Libyan conflict.

He said: "Some European countries will need to ask themselves whether they are genuinely committed to Nato or whether they regard it as an a la carte menu. The latter is unacceptable."

Britain is part of the Coalition force which has been conducting operations in Libya since March under a United Nations mandate which has authorised military action in Libya to protect local people.

Dr Fox added that other European nations which were not supporting the Nato action could not afford to be complacent and assume that the US would always be an ally.

He said: "The United States has a major commitment in Afghanistan – much bigger than any European country – and it has still got an engagement in Iraq, there are also very worried about the situation in the Gulf and have a lot of military assets there in case there is further trouble.

"Other European countries and members of Nato will have to recognise that they cannot get the insurance policy and have other people pay the premiums."